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Buyout was the most popular private equity strategy among investors in 2013. $192.5 billion was raised by buyout houses which equalled half of the total capital collected in the year. Indeed, eight of the ten largest funds in 2013 were buyouts, together collecting $89.69 billion. Apollo Investment Fund VIII – the second largest fund ever – closed in December on $18.38 billion, surpassing its $17.5 billion target. The success of buyouts was not surprising given the results from the 2013 PEI Investor Sentiment Survey which revealed that buyout was the most popular strategy among investors.
As highlighted in a previous Chart of the Week, debt funds have also attracted more interest in the years since the financial crisis. EIG Energy Fund XVI, which held a final close at the end of November, was the largest debt fund to close in 2013, collecting $1.75 billion more than its $4.25 billion target. Minnesota State Board of Investment and Washington State Investment Board both invested in the fund.
By contrast, the fundraising total for venture capital in 2013 ($68 billion) was marginally down on 2012’s total. KKR’s second Asian Fund was the largest venture capital/ growth equity fund to hold a final close in 2013, reaching its target of $6 billion. Investors in the fund include Canada Pension Plan Investment Board (CPPIB), Cathay Life Insurance and Ilmarinen Mutual Pension Insurance Company.